CMS Puts RPM in the Crosshairs

And the flag is out! or at least it’s being proposed!

Third-party remote patient monitoring vendors were caught offside in the proposed rule for the 2027 Medicare Physician Fee Schedule, which would bar reimbursement for RPM services unless they’re performed by clinical staff that’s directly employed by the practice doing the billing.

Drastic times call for drastic measures. CMS’s proposed change follows widespread concerns over skyrocketing costs for low-value services. Medicare started covering RPM in 2018, and payments ballooned to more than $500M by 2024.

  • An OIG watchdog report – also 2024 – showed that 43% of Medicare beneficiaries receiving RPM weren’t getting at least one of the three required components: devices, education/setup, and treatment management. 
  • It also pointed out that Medicare lacks basic information needed to properly bill for RPM, like who ordered the monitoring in the first place.

CMS means business. Although the OIG’s concerns seem like some pretty good levers to pull before taking the nuclear option, the latest estimates show that Medicare could recover over $4B from criminal cases filed in the last six months alone.

The proposed rule pins the problem on vendors:

  • Medicare would only reimburse RPM and RTM when they’re performed by clinical staff employed by the billing practice, not third-party companies (pretty much every RPM company we’ve ever covered).
  • The rule would also require a separate visit to kick off any remote monitoring episode, limiting the service to patients that have an established relationship with the billing practice.

That would effectively end RPM as we know it. CMS is proposing to throw the baby out with the bathwater, eliminating the bad actors at the expense of the good ones – and their patients.

The initial response was predictably… not great:

  • Brook.ai CEO Oren Nissim summed it up nicely. “We fully support CMS’s goal of ensuring remote care is driven by clinical need, integrated into physician-directed care, and delivered through close collaboration between physicians and integrated clinical teams. The challenge is strengthening oversight while preserving the collaborative care models that help providers expand access, extend clinical capacity, and deliver high-quality longitudinal care at scale.”
  • Cadence CEO Chris Altech shared a similar sentiment. “The challenge is that the proposal doesn’t distinguish at all between low quality RPM and clinically integrated programs… The result of the current rule in its current form will be more untreated chronic disease, higher downstream costs for Medicare.

The Takeaway

There’s a ton of fraud in Medicare. There’s even more waste. Does that mean burning RPM to the ground is the best solution? You can let CMS know what you think until September 16th.

Cadence Lands $100M to Scale Chronic Care

One of the hottest names in chronic care just got nine-figures hotter after Cadence hauled in $100M of Series C funding to scale up with AI agents.

Welcome to the unicorn club. The round vaulted Cadence’s valuation to $1.2B as it looks to extend the reach of its Clinical Intelligence platform to more patients managing chronic conditions like hypertension, diabetes, and heart failure.

  • The platform is purpose-built to deliver continuous support between visits, with regular vital monitoring and AI agents that translate the data into timely medication adjustments and personalized lifestyle coaching. 
  • Cadence integrates directly with its partners’ EHRs and clinical workflows, then equips every patient with connected devices that allow its system – supervised by physicians – to flag high-risk patients and predict adverse events before they happen.

Cadence lets its numbers do the talking. It’s easy to see why.

  • 70% relative improvement in blood pressure control (JACC).
  • 27% fewer hospital admissions (Mayo Clinic Proceedings).
  • 230% increase in heart failure patients on GDMT (JCF).
  • $1,300 annual cost reduction per patient (Circulation).

Now it’s time to scale. Cadence is already treating 100k patients, and this investment will support the infrastructure “to treat millions.”

  • The current partner roster includes over 20 major health systems, including new additions like Texas Health Resources and Duke Health, which liked working with Cadence so much that it participated in the round.
  • The word on the street is annualized revenue is pacing $140M for FY 2026, more than double the $62M it brought in last year.

Last but not least. Scaling from thousands of patients to millions of patients is no small task, and Cadence is working on deploying new AI agents to help carry the load.

  • A new prescription hypertension management agent is reportedly en route, which “pre-authorizes” medication recommendations to steer patients toward their blood pressure goals, with new prescriptions and dose changes made autonomously by the AI.
  • That falls squarely in medical device territory, and Cadence is actively working with regulators to bring it to patients – including an application to the FDA’s TEMPO pilot that will let certain devices for chronic care on the market before they’re officially approved.

The Takeaway

Chronic disease is the single largest driver of healthcare spending in America, and a significant amount of that cost is avoidable. Cadence is building the tools to avoid it, and another $100M should only help the cause.

Peterson Center on Healthcare Takes Aim at Remote Patient Monitoring

The Peterson Center on Healthcare is back with another report that doesn’t mince words when it comes to remote patient monitoring: “RPM reimbursement in Medicare is misaligned with the clinical value of these tools.”

The report synthesized Peterson’s past evaluations of diabetes, hypertension, and musculoskeletal solutions, which encompassed the trio of conditions associated with the highest spending and utilization for remote monitoring services.

Although only ~1% of Medicare patients are in RPM programs, utilization has grown exponentially since the start of the pandemic.

  • There’s been a tenfold increase in Medicare patients using RPM services from 2019 to 2023 (44k to over 451k patients). 
  • Medicare expenditures for RPM skyrocketed from $6.8M to $194.5M over the same time period.

There’s also been a steady rise in long-term monitoring, even though research suggests most of RPM’s benefits accrue within the first few months.

  • The average RPM episode duration was just 1.7 months in 2019, jumping to 5.2 months by 2023. Over 22% of RPM episodes now last over nine months.
  • There’s currently no limit on how long providers can use RPM for a specific patient, meaning they can be reimbursed “on a monthly basis in perpetuity for anyone with a diagnosed chronic condition, even if they are already well-managed.”

PCH offered three recommendations to policymakers to combat these issues:

  • Base coverage and reimbursement on proven clinical value for different conditions. 
  • End indefinite billing practices for “forever codes” that encourage waste. 
  • Improve data collection to enable evidence-based decision making about the value and use of remote monitoring. 

The Takeaway

As providers adopt new technologies that extend care beyond the walls of the hospital, aligning incentives with high-value care sounds like an obvious approach to reimbursement, but PCH’s report makes it clear that current policies need an overhaul if they’re going to maximize the effectiveness of RPM programs.

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